Question

Grouper Enterprises Ltd.’s records reported an inventory cost of $55,900 and a net realizable value of $52,200 at December 31, 2018. At December 31, 2019, the records indicated a cost of $71,000 and a net realizable value of $61,800. All opening inventory had been sold during the year.

(a)

Your answer has been saved. See score details after the due date.

Assuming that Grouper Enterprises uses a perpetual inventory system, prepare the December 31, 2019 entry that is needed under the direct method and the indirect method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
	Direct method
December 31, 2019	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	Indirect method
December 31, 2019	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

  

Attempts: 1 of 1 used

(b1)

Assume that at December 31, 2020, the records indicate inventory with a cost of $61,600 and a net realizable value of $62,700. Prepare the December 31, 2020 entry that is needed under the direct method and the indirect method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
	Direct method
December 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	Indirect method
December 31, 2020	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

Date	Account Titles and Explanation	Debit	Credit
	Direct method
December 31, 2019	Cost of goods sold	9,200
	Inventory		9,200
	Indirect method
December 31, 2019	Loss on Inventory due to decline in NRV	5,500
	Allowance to Reduce Inventory to NRV		5,500

Date	Account Titles and Explanation	Debit	Credit
	Direct method
December 31, 2020	No Entry
	Indirect method
December 31, 2020	Allowance to Reduce Inventory to NRV	9,200
	Gain on Inventory due to incline in NRV		9,200